Estimating Creditworthiness using Uncertain Online Data

The rules for credit lenders have become stricter since the financial crisis of 2007-2008. As a consequence, it has become more difficult for companies to obtain a loan. Many people and companies leave a trail of information about themselves on the Internet. Searching and extracting this information is accompanied with uncertainty. In this research, we study whether this uncertain online information can be used as an alternative or extra indicator for estimating a company's creditworthiness and how accounting for information uncertainty impacts the prediction performance. A data set consisting 3579 corporate ratings has been constructed using the data of an external data provider. Based on the results of a survey, a literature study and information availability tests, LinkedIn accounts of company owners, corporate Twitter accounts and corporate Facebook accounts were chosen as an information source for extracting indicators. In total, the Twitter and Facebook accounts of 387 companies and 436 corresponding LinkedIn owner accounts of this data set were manually searched. Information was harvested from these sources and several indicators have been derived from the harvested information. Two experiments were performed with this data. In the first experiment, a Naïve Bayes, J48, Random Forest and Support Vector Machine classifier was trained and tested using solely these Internet features. A comparison of their accuracy to the 31% accuracy of the ZeroR classifier, which as a rule always predicts the most occurring target class, showed that none of the models performed statistically better. In a second experiment, it was tested whether combining Internet features with financial data increases the accuracy. A financial data mining model was created that approximates the rating model of the ratings in our data set and that uses the same financial data as the rating model. The two best performing financial models were built using the Random Forest and J48 classifiers with an accuracy of 68% and 63% respectively. Adding Internet features to these models gave mixed results with a significant decrease and an insignificant increase respectively. An experimental setup for testing how incorporating uncertainty affects the prediction accuracy of our model is explained. As part of this setup, a search system is described to find candidate results of online information related to a subject and to classify the degree of uncertainty of this online information. It is illustrated how uncertainty can be incorporated into the data mining process.